Break-even is the point when in business there is no profit no loss situation.
Given: -
Cost of freezer = $200
Cost to make one scoop ice-cream cone = $0.45
Cost of selling each cone = $1.25
Solution: -
To reach break-even one must earn at least $200
By above information we get profit on each cone = Cost of selling cone- Cost
of making each scoop
=$1.25-$0.45
=$0.80 = profit earned on each cone.
To earn $200 we must sell = $200/$0.80 = 250 cones. 250 cones are needed to sell to reach break-even.
